Great Southern investors want Minister to intervene

The West Australian

Wednesday, 15 July 2009 10:24PM

Great Southern investors have called on Financial Services Minister Chris Bowen to intervene in the receivership of the collapsed group, warning they had lost confidence in the "fundamentally flawed" process being run by receiver McGrathNicol.

Mirroring a revolt by Timbercorp growers against its liquidator, Great Southern's creditors' committee has sent a submission to the Minister urging him to convene a meeting of all Great Southern stakeholders to devise a rescue plan for the group.

"We have lost confidence in the process being undertaken, particularly by McGrathNicol in dealing with the issues relating to the administration of Great Southern and seek your urgent intervention in the matter," committee spokesman Phillip Capicchiano wrote in the submission.

"Ultimately, we believe the process may unnecessarily result in the winding up of Great Southern MIS (managed investment scheme) projects and/or selling of assets at less than market value to pay out the debt owed to the club bank syndicate, to the detriment of (other stakeholders)," he said. The committee says urgent action is needed "to prevent the potential loss of billions of dollars to these stakeholders and to protect the future investment" in the sector.

Mr Cappicchiano said the Government had a mandate to support investment in the agricultural and timber industries, where McGrathNicol did not. Great Southern is in the hands of administrators Ferrier Hodgson, although its lenders have also appointed McGrathNicol as receivers of certain subsidiaries and assets, including the responsible entity for its managed schemes.

"With a government intervention, we can look at (the interests of) all the shareholders," he said. "By involving all stakeholders, it will be through that collection of ideas and experiences that we'll find the right model."

It comes after McGrathNicol last week gave its strongest indication yet that it would seek to wind up the group's 43 MIS projects, although it will take another four to six weeks to make a final decision.

A spokesman for Mr Bowen said the Minister would be "happy to meet with the creditors of Great Southern" at an appropriate time. Mr Bowen has yet to assess the submission.

It comes as Timbercorp investors await a decision by major lender ANZ as to whether it will sign off on a proposed restructure of the failed group's almond schemes, which the growers say would give a return to both the bank and investor growers. As the secured creditor of the almond assets, the bank needs to approve the deal.

The Timbercorp growers committee has already raised hundreds of thousands of dollars to finance its court appearance on Wednesday, at which Timbercorp liquidator KordaMentha will seek to wind up the almond schemes if a deal has not been struck by then.